ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Black Hole Gets Bigger

by 5m Editor
7 March 2009, at 7:00am

UK - Although one or two of the smaller fresh meat wholesalers were hoping they might have been able to drop their prices by a penny or two, as it turned out the black hole in pig supplies is continuing to deepen with the result that several abattoirs ended the day short of stock and had to up their bids to get the numbers required, writes Peter Crichton.

The DAPP continues to make steady upward progress and now stands at 139.24p which delivers DAPP-plus contract prices of between 144-146p, but still a shade behind spot.

There is an old saying in markets that ‘the hottest are the coldest’ and this has now been reversed with the result that some abattoirs who could buy almost unlimited numbers a year ago now had to bid close to 150p to get enough today.

Those processors who last autumn were saying that the DAPP unfairly represented a realistic pig price (because it was too high) are now strangely silent, but generally over a 52 week period contract prices tend to come out ahead when compared with spot.

Spot bacon quotes on Friday opened at 145-6p, but as the day wore on sellers were able to achieve offers of up to 149p with still a fairly wide north/south divide and quite a difference between different slaughter plant specifications.

Because smaller fresh meat wholesalers are having a fairly tough time in the high street, lighter weight cutters failed to achieve much of a premium above bacon and a ‘one priced pig’ remains on the menu.

Despite what sounds like a whopping 50 per cent cut in base rate (from 1 per cent to 0.5 per cent) sterling has remained remarkably stable and the euro closed on Friday worth 89.2p, a fraction up on its value a week ago.

European pigmeat prices are reported to have rallied slightly in some countries as herd numbers continue to tighten following long periods of unprofitability along much the same lines as we were experiencing over here 12 months ago.

Thanks to the stability of the euro, United Kingdom cull sow prices have also remained at almost identical stand-on levels with very few sellers reported to be receiving less than 116p and a copper or two more available for large loads with numbers still on the tight side.

Weaner prices are continuing to soar with the AHDB 30kg ex-farm average now standing at £49.46/head, but several cases of weaners are being traded in the £52-£54/head range and more available north of Watford.

Another ray of sunshine for pig producers has emerged in the grain market where feed wheat prices seem to be in modest retreat with current ex farm quotes of not much more than £100/tonne, although forward prices are painting a slightly firmer picture with November quoted at £125/tonne.

Several industry watchers have commented it is such a pity that we seem to have moved from feast to famine in such a short period. If only the big retailers had been better supporters of the British pig over recent years they would not have to pay as much for it now and the human cost is a number of hardworking dedicated pig farmers who have been forced out of the business in the meantime.